Asbestos Names Reach Higher Ground

A rash of asbestos credits moved up last week,
as dealers noted increasing comfort with liability issues.
Crown Cork & Seal hit the high 80s from the mid-80s. A $10
million piece of Owens-Illinois' debt traded in the low 90s and
a $5 million piece of USG traded into the low 70s from the high
60s. Dealers said the asbestos fear that triggered a downgrade
in levels last fall is starting to clear. "The genie is back in
the bottle. People are more familiar with the liability
issues," said a market player. "At first, the potential losses
[from lawsuits] were off the chart." Calls to Timothy Donahue,
cfo of Crown Cork, were not returned. Calls to David Van
Hooser, cfo of Owens, were referred spokesman Phil McWeeny, who
did not comment by press time. Calls to Richard Fleming, cfo of
USG, were not returned by press time.
Dealers have said that with most of the
companies filing for Chapter 11, bankruptcy protection helped
them restructure and protected them from mounting liability.
Meanwhile, players had time to regain confidence in the
credits. USG, which recently filed, has seen an uptick in
levels ever since. "People are taking the view that it's going
to be a bumpy ride, but that it's worth it to stick it out
because of the market share these companies have, meaning
they're long-term players," a dealer said.